LU-VE S.p.A.’s Board of Directors reviewed and approved the consolidated financial report as at 31 December 2022.
“2022 was a particularly sad year due to the death of my father, founder and inspiration of LU-VE Group. The ‘Gardener of dreams’, as he loved to call himself, has left a great void but also an equally great lesson, which will guide us towards the future – said Matteo Liberali, Chairman and CEO of LU-VE Group. From the point of view of results, we are proud to have reached a new record in turnover, despite the dramatic disturbances caused by the war in Ukraine, the supply chain difficulties and inflation. Last year we laid the foundations for growth with the acquisitions carried out and with the activities to improve our sustainability. With the usual passion we are working on new projects to be ready to catch all market opportunities. I would like to thank all the women and men of the LU-VE Group for their commitment and determination, which I am sure they will demonstrate also in the future”.
In 2022 the group achieved:
Turnover of €618.6 million (an increase of 25.7% compared to 2021; at constant exchange rates, turnover would have grown by 23.8%).
Adjusted EBITDA of €78.8 million, an increase of 29.6% compared to 2021.
Net profit for the year of €49.1 million, an increase of 98.0% compared to 2021. Net of non-recurring revenues and costs, adjusted net profit would have been €35.2 million, up by 42.0%.
Leverage ratio a 1,81. Net financial position negative for €142.3 million, as at 31 December 2022, an increase of 16.7% compared to 2021.
Order backlog of €188.8 million as at 31 December 2022, an increase of 4.8% compared to 2021.
The general framework
The year 2022, which unfortunately ended with the death of Mr. Iginio Liberali, founder and Chairman of the Group, was a very intense and challenging year that has led to a new record turnover (over €618 million) and which saw the completion of three extraordinary transactions (the acquisition of Refrion and the assets of ACC Wanbao, as well as the sale of the subsidiary Tecnair) and the launch of new important projects for future development.
Despite the disturbances resulting from the dramatic invasion of Ukraine, the market experienced extremely brilliant demand in the first part of the year, followed by a significant slowdown in some segments in the second half of the year. Product sales grew by 25.2% to €605 million, while the order backlog of €188.8 million at the end of the year (+4.8% compared to the end of 2021) returned on more organic values after months of tumultuous growth (up to a record €221.4 million at the end of April). This growth was mainly generated by the growth of the end markets and in part by orders from OEM’s customers, which aimed to replenish safety stocks and the “reservation” of production capacity, at a time of general uncertainty in relation to procurement and of lengthening delivery times by all operators in the sector.
With a view to further extending the LU-VE Group’s presence to the air conditioning, data centre, process cooling and industrial refrigeration segments, on 30 March 2022, the acquisition of a 75% interest in Refrion S.r.l., whose registered office is in Flumignano (Udine), was finalised. The company specialises in the production of air cooled equipment combined with adiabatic technology, which allow significant reductions in energy consumption, water use and noise emissions. The agreement provides for a put & call option to purchase the remaining 25%, exercisable within the next five years.
The purchase of the Italia Wanbao ACC S.r.l. business unit, located a few kilometres from Limana, was concluded for a value of €70 thousand on 3 August 2022, through the subsidiary Sest S.p.A. of Limana (Belluno).
The agreements signed envisage:
the complete site industrial reconversion, in order to expand the production of heat exchangers for refrigerated counters, heat pumps and “chillers”;
the absorption within three years from the signing of the contracts of a significant part of the current workers of “WACC”;
total investments in the production site (which has a covered area of approximately 40,000 square metres) for approximately €6 million over the next three years.
The first step for the reconversion of the production site had already been completed at the end of September, with the start-up of two production lines and the hiring of a first group of workers, in line with the agreements. As planned, the deed for the purchase of the entire production site was concluded at the beginning of December.
On 21 March 2022, the sale was completed of the entire equity investment (79.9%) in Tecnair LV S.p.A. (active in the production of close control indoor air conditioning units for operating rooms and data centre applications) to the Swedish company Systemair AB, listed on the Stockholm Stock Exchange, for a value of €12.9 million (which generated a financial income at consolidated level of around €9.5 million). The parties also signed a long-term agreement for the supply of heat exchangers and related products, and for the continuation of cross-selling relating to indoor air conditioning units, while the LU-VE Group will continue to focus on outdoor air conditioning systems for state-of-the-art data centres. These agreements were negotiated at market values. The de-consolidation of Tecnair LV S.p.A. took place from 1 April 2022.
Geographical markets
In 2022, turnover generated within the European Union was €473.2 million, an increase of 26.6%, accounting for 78.2% of total sales.
For the first time in the history of the Group, the American continent rose to second place in the ranking by geographical macro-areas, thanks to a growth of more than 77%.
In addition to the USA and Canada, among the countries that recorded the greatest increases in 2022, we note in particular Germany (+81.7%) and Finland (+53.4%).
Obviously, there was a strong drop in sales in the countries of the former Soviet Union (-14,4%).
The incidence on total sales relating to exports in 2022 fell to 80.2%, as a result of strong growth in the Italian market (+32.2%) and also by virtue of the entry of the newly acquired Refrion into the scope.
Product and application segments
“Cooling Systems” SBU – Growth amounted to +24% with a turnover of €257.5 million. Compared to the “Components” SBU, the trend was more evenly distributed over the year. In fact, although “Cooling” also suffered in the second half of the year a slight contraction in projects relating to large-scale distribution and in general to the “commercial refrigeration” world, this contraction was more than offset by the continuous growth of “industrial refrigeration”, which in recent years has seen the Group play an increasingly leading role in Europe and the rest of the world, thanks to the cutting-edge solutions developed in high energy efficiency and low environmental impact applications with natural fluids. As expected, 2022 was also an extremely positive year in “industrial cooling” (+51%) and in “data centre” (21%).
As already was the case in 2021, the “Cooling” SBU played a role in protecting margins also in the last year, with two increases in sales prices, followed by a third one starting from January 2023.
